Liquidity of cash is the ability of a business to quickly access cash on hand or by other means. This liquidity can be achieved through asset sales, debt collection, and cash advances. High liquidity of cash gives businesses the flexibility to continue operations efficiently, as well as fund new opportunities and investments. Without adequate liquidity of cash, businesses may struggle to meet their daily operating expenses and may face bankruptcy due to unpaid bills and lack of capital. Having reliable sources of liquidity helps ensure that businesses run smoothly and remain profitable in any economic environment.